Article Archives: Ohio

Ohio Catalyst to Affordable Housing

The Ohio Capital Corporation for Housing (OCCH) is a nonprofit financial intermediary that provides developers of affordable housing with access to capital markets. The corporation also serves as the region’s largest provider of Low-Income Housing Tax Credit equity.

OCCH recently closed its 23rd equity fund, with a total of more than $2.1 billion in private investment for affordable housing projects. To date, OCCH has invested in more than 450 developments with more than 25,000 affordable housing units in Indiana, Kentucky, and Ohio. Many OCCH projects have been qualified investments under the Community Reinvestment Act.

OCCH also funds supportive housing projects. For example, OCCH’s Ohio Equity Fund XX invested in the YWCA Independence Place, a 22-unit permanent supportive housing project in Cleveland. The $5.3 million project serves young women who have aged out of foster care. The YWCA of Greater Cleveland provides services for these women. The property is managed by the Cleveland Housing Network. The two nonprofit organizations jointly developed the project.

OCCH’s investors include JP Morgan Capital Corporation, U.S. Bancorp, Fifth Third Bank Community Development Corporation, Key Community Development Corporation, Huntington National Bank Community Development Corporation, Park National Bank, FirstMerit Bank, First Federal of Lakewood, and Citizens Bank.

In December 2011, OCCH issued its latest private placement equity fund, OEF XXII, and expects to close the fund during first quarter 2012.

New Ohio CDFI Promotes Economic RevitalizationThe Finance Fund Capital Corporation, a statewide Community Development Financial Institution and the lending arm of the Finance Fund, promotes economic revitalization and community development in low-income communities by providing access to capital, facilitating investment, and financing opportunities throughout Ohio. To that end, its Community Investment Fund (CIF) provides financing for projects such as affordable housing and community facilities (a category that includes charter schools, community centers, and health clinics).

An investment commitment to the CIF has the potential to benefit the investor with a competitive return on investment, a Community Reinvestment Act credit-eligible investment, and Bank Enterprise Award eligibility. Such investments achieve significant community impact throughout Ohio’s urban and rural communities. The terms of the fund are designed to provide a tailored program that fits all the investor’s needs for community investing. Investment amounts can be as low as $250,000 for investment in a pooled loan fund or more than $1 million for a private loan fund. Terms range from five to seven years, and the investment offer is secured by business assets.

For more information, e-mail Valerie Heiby, Director of Development at the Finance Fund Capital Corporation, or call (614) 568-5055.[Community Developments Investments, Spring 2011]

Ohio Launches a New Market Tax Credits ProgramLast fall, Ohio created its own state NMTC program to leverage federal NMTCs, encourage private investment in Ohio businesses, and spark revitalization in Ohio's communities.

Ohio's NMTC is similar to the federal NMTC in that the credits are structured over a number of years. The total tax credit value is 39 percent over seven years.

Tax credits will be awarded to CDEs that have federal tax credit allocations. The CDEs will then be required to invest the federal and state credits into Ohio businesses and projects.

As private markets have struggled, this type of program has become increasingly important for businesses needing access to capital. Investors will receive state credits in exchange for delivering below-market-rate investment options to Ohio businesses. To date, five other states have initiated similar programs to leverage federal NMTCs.

Ohio's Department of Development administers the program and began accepting applications during summer 2010. For more information, e-mail Mark Lundine or call (614) 644-6552.[Community Developments Investments, Fall 2010]

Lifeline for Stabilizing Ohio NeighborhoodsOhio's Finance Fund has developed an innovative line of credit for nonprofit organizations to acquire or stabilize vacant or abandoned properties. Finance Fund's LandLOC (line of credit) provides financing for qualified nonprofit organizations to gain site control of properties or to provide patient capital for nonprofits to resolve legal or tax issues or otherwise secure or maintain properties. Qualified nonprofits must demonstrate capacity and the LandLOC funding must be for projects that are part of a comprehensive plan, either city, county, or regional. The program is currently in a pilot phase that was funded with $1 million in 2007 by the Ohio Housing Trust Fund. So far with the program, two rural and three urban communities have been extended credit. The result of the pilot will be analyzed at the end of the year, but already it is anticipated that additional funding will be needed to expand the financing for other communities, namely in rural areas or for vacant commercial real estate. Investment opportunities for financial institutions are sought as patient capital for terms of three to five years at a return rate of 3 to 4 percent. Finance Fund is seeking to raise $10 million to finance projects in highly distressed areas and bring about neighborhood stabilization.

Small Loans, Big ReturnsWays to Work (WtW) is a nonprofit, community development financial institution that helps lower-income people. WtW is designed to help borrowers attain financial independence and advance economically by having money to purchase dependable used cars to get to work or school. Since 1996, WtW has originated nearly 12,000 loans for more than $31 million and the average auto loan amounts to an average $3,400. Results of a 2006 WtW evaluation indicate that borrowers reported an average increase of 41 percent in their take-home pay. In addition, 67 percent of WtW borrowers report that they have used conventional financial services subsequent to receiving their WtW loans.

WtW offices are located in social service agencies affiliated with the Alliance of Children and Families (ACF). ACF agencies screen and provide financial education to borrowers and service the loans. WtW local offices provide financial education to more than three persons for every individual who receives a loan. Investors in WtW include several national foundations, the Community Development Financial Institution Fund of the U.S. Treasury Department, local United Way offices, and financial institutions. Banks can be involved by investing in the national WtW loan fund, by referring to local WtW offices prospective borrowers who do not meet conventional credit criteria, by participating in local WtW loan committees, and by providing grants and in-kind donations to WtW.

For more information, contact President Jeff Faulkner at (414) 359-1448 ext. 2, e-mail him, or visit his Web site.

[Community Developments Investments, Fall 2008]

Wealth+Education+Collaboration+Opportunity=WECO Fund in OhioThe WECO Fund, a community and economic development agency, was established in 1971 in Cleveland, Ohio. Through a continuum of comprehensive services, participants receive financial education, long-term support, and access to capital. WECO runs the Microentreprise Center that, aside from entrepreneurship training, administers a number of "microloan" funds.

WECO allows banks to provide community development loans by lending to the fund. Typical terms are at four years and interest-free loans. In addition, WECO administers a statewide individual development account (IDA) program. IDAs are matched savings accounts that enable low- and moderate-income families to save and build assets. WECO is seeking $250,000 in private funds to match its public funds.

Mark McDaniel, Great Lakes Capital Fund, or call him at (317) 423-8880.

Cornering the Market on Innovative Rental OpportunitiesCornerstone Community Loan Fund was founded in 1986 to provide a means for people to support economic justice and opportunity in Greater Cincinnati and Northern Kentucky. The fund has expanded its scope to create conditions for low-wage families to develop ownership skills and economic assets. Through the Cornerstone Renter Equity program, the working poor can move from renting to investing in housing and financial assets. Cornerstone organizes and trains groups of households to cooperatively take on the care and management of their housing in exchange for "equity credits." Households earn equity credits each month that rent is paid on time, when they participate in the resident organization and when they perform routine maintenance responsibilities. The credits can be converted to a cash payment through Cornerstone after five years.

Through this program, residents benefit from gaining both ownership skills and financial equity. Participating property owners benefit from reduced operating costs and turnover, plus higher long-term property value. The community becomes more stable as residents take greater interest in their housing and neighborhood. Cornerstone is currently seeking additional financial institutions to invest in the fund by lending to it at below-market interest rates.

For further information, please visit the or e-mail Margery Spinney or call her at (513) 369-0114.[Published in News from the Districts, Community Developments, Spring 2008]

Introducing the Grow Cuyahoga County FundThe new Grow Cuyahoga County Fund makes loans of $35,000 to $1 million to small businesses in Cuyahoga County, Ohio that may not meet all conventional bank underwriting requirements but that have the potential to grow and create jobs. The fund often makes its loans in conjunction with bank loans and tailors its terms to fit the borrower's cash flow available for debt service, frequently by extending the loan maturity date. Loan proceeds can be used for any business purpose, including working capital, machinery and equipment purchases, land and building acquisition, new construction, building renovation, and leasehold improvements. Interest rates are between prime and prime plus two percent, and the loans may have terms of up to 25 years, depending on the useful life of the asset being financed. The Board of Commissioners of Cuyahoga County (BOCC) created the fund with the National Development Council (NDC), an economic development training and financing organization that also is a licensed SBA 7(a) lender and a certified community development financial institution. NDC will underwrite close, and service loans for the fund and will provide $4 of matching funds for every local dollar invested in the Fund. BOCC and the Cuyahoga County Community Improvement Corporation provided the initial capital for the Fund and are seeking investments from other potential partners, such as banks, the Greater Cleveland Partnership, the city of Cleveland, the Port Authority of Cleveland, and local foundations. Banks can become involved in the Grow Cuyahoga County Fund by: (1) structuring the fund into financing packages for borrowers, (2) referring prospective borrowers to the fund, and (3) investing capital in the fund.

For more information, contact Anthony Thornton, Economic Development Manager, at (216) 443-3159 or by e-mail at cdart@cuyahogacounty.us.[Published in News from the Districts, Community Developments, Winter 2006-2007]

Appalachian Region's Progress Fund ExpandsTourism in the Appalachian region of Ohio is getting a boost from the Progress Fund, a certified community development financial institution (CDFI) lending needed capital and providing entrepreneurial coaching to small businesses in the travel and tourism industry.

Using a start-up grant of $200,000 from the State of Ohio, the Progress Fund is expanding its service area, currently encompassing 39 counties in Pennsylvania and West Virginia, into the 29 counties of Ohio's Appalachian region. The Progress Fund supports the niche industry of tourism businesses, including bed and breakfasts, brew-pubs, general stores, restaurants, museums, and similar small businesses that attract and serve visitors in rural areas. The Progress Fund is currently seeking investors to capitalize its Ohio expansion. Investors are asked to invest a minimum of $100,000 to help meet the organization's goal of a $5 million fund by 2007. Terms are flexible and negotiated individually with investors. Examples of previous investment terms have included a non-amortizing, 10-year loan at below market interest rates.

To invest in any of the Progress Funds, please contact David Kahley, CEO, at (724) 529-0384, or visit it's Web site, www.progressfund.org.[Published in News from the Districts, Community Developments Investments, Spring 2006]

Adventures in ACEnet Ventures FundACEnet Ventures Fund, a community development venture fund, is dedicated to assisting distressed central Appalachian communities in 27 counties across Ohio, Kentucky, and West Virginia. This fund provides equity and debt investments in specialty food and technology businesses, including start-ups, as a potential source of wealth creation for the low-income owners and employees of the businesses. Banks can invest in the fund through equity equivalent investments.

Contact: Rick Krieger at (740) 592-3854, or visit www.acenetworks.org.[Published in News from the Districts, Community Developments Investments, Summer 2005]

Cincinnati Development FundCincinnati Development Fund (CDF) is a certified community development financial institution established in 1988 to finance affordable housing development and community revitalization in the Greater Cincinnati area. CDF provides capital and financial consulting as a catalyst for comprehensive community development. CDF has five active loan pools, of which the Community Reinvestment Loan Pool provides affordable housing construction and permanent financing. Under this pool, developers can borrow for both construction and permanent financing using one mortgage note and therefore only necessitating one closing. CDF is now seeking new investors for Loan Pool VII for a three-year commitment.

Contact: Robin McNulty at (513) 721-7211 or log on to www.cincinnatidevelopmentfund.org.[Published in News from the Districts, Community Developments Investments, Summer 2005]

Community Development Lending Leads to Improved InfrastructureGreat Lakes Rural Capital Assistance Program (GLRCAP) is a non-profit firm helping small communities in Illinois, Indiana, Kentucky, Michigan, Ohio, West Virginia and Wisconsin install and improve drinking water, wastewater and solid waste infrastructure and management systems serving lower-income populations. Banks can provide construction financing and long-term loans for these projects. GLRCAP, which works through local community action agencies, recently won a $700,000 grant to assist local communities with planning for affordable housing and economic development. Banks can provide loans for projects that GLRCAP helps plan.

For more information, contact Debra Martin at (800) 775-9767 or dcmartin@wsos.org.[Published in News from the Districts, Community Developments, Spring 2003]